Chart: WorldWideMarkets Alpha Trader
The pound fell sharply yesterday from the 1.5500 level against the stronger US Dollar after the higher than expected US core inflation +0.2% in January versus the estimate of +0.1%.
In early Europe, cable selling broke the 1.5400 level and found elicit support at 1.5385 stemming from corporate demand of the euro versus the pound. Euro-sterling rose from 0.7255 to 0.7297 just 3 pips shy of the 0.7300 psychological resistance.
However, the range remains fairly narrow in the European session following the well offered 115 pip price drop yesterday from 1.5500 to 1.5385.
The end-of-month position squaring and short covering pushed the pound higher prior to the NY open as the rate made a modest rebound to 1.5445 from the 1.5385 support.